Each year the Heritage Foundation and the Wall Street Journal compile a list of the top 10 countries with the freest economies in the world.

This year over 10 different categories of freedom were measured. Things like trade freedom, business freedom, investment freedom, property rights and so on.

The freer the economy the easier and better it is to do business in the corresponding country. It is no coincidence that the same countries in the top of the freest economies in the world list also serve on the top of charts like richest countries in the world and happiest countries.

To find the freest economy in the world 10 different categories were measured within each country. The maximum score was 100 points, meaning that a country with that score would be absolutely free all aspects. No one got the maximum score, but a few countries came close.

10. Chile – 77.2 points (from 100 maximum)

When hearing the name Chile, most people think it is a poor third world country. Not anymore it is!

Among with the rest of Latin American countries Chile used to be a place of poverty but thanks to the reforms in the last 3 decades it has transformed itself to be the freest economy in South America.

The cornerstone of Chile is its sound financial policy allowing for foreign investments to pour into the country. Chile has been keen to sign free trade agreements with countries all over the world.

In addition to its strong financial sector Chile is also the largest exporter of copper in the world.

9. Denmark – 77.9 points

In addition to being the happiest country in the world Denmark is a country with an extraordinarily strong financial sector. The banking crisis of 2008 and 2009 left the country unharmed, mainly because the government’s oversight of the banking industry is working exceptionally well. If the US had a financial oversight body working half as good, we wouldn’t have had the housing bubble that burst in 2008.

Denmark would be even higher in the list of the world’s freest economies if the government would pull back on its spending. The taxes are exceptionally high – some people have to give away 73% of everything they make! If that ain’t crazy, nothing is!

8. USA – 78,0 points

Compared to the year before, the US has lost quite a bit in the freeness of its economy. Because of the economic crisis that started in 2008 the government has decided to accept a number of financial and monetary regulations that have undermined the countries economic freedom.

The government has helped bail out a number of large banks, car manufacturers and other large companies but is itself allowing  its budget to get more and more into deficit.

Some experts seem to agree that the US is heading into bankrupcy.

7. Canada – 80.4 points

Thanks to the declinel of USA, Canada is now the freest North-American economy. Its strengths include lack of corruption, financial freedom and property rights. Unlike the USA, Canada has a budget surplus.

It looks that instead of following the lead of USA, Canada is more closely following its European friends. Just like many countries in Europe, Canada has a great welfare program and many social programs intended to make the lives of their people better.

6. Switzerland – 81.1 points

Switzerland has earned its high place in the freest countries in the world list because of its legendary neutrality. The Swiss never pick sides – this has helped them to stay out of trouble and make the country a fortune.

During the World War 2, Switzerland was the only place where many people could deposit their gold and money. Because of the neutrality they could be sure that the money would be safe and they could withdraw it after the war ends. Capitalizing on the image of neutrality has made Switzerland one of the largest financial centers in the world.

5. Ireland – 81.3 ponts

Ireland is the freest economy in Europe. Although the financial sector got hit when the housing bubble burst in 2008, the overall business climate is excellent.

Throughout the 1990s and the early 2000s Ireland benefited greatly from its flexibility and openness. In recent years one could say that the same openness is also to be partly blamed for the financial crisis currently in Ireland. The government is planning to buy up all the non-performing loans the banks have amassed throughout the last 2 decades.

4. New Zealand – 82.1 points

While most people know New Zealand as a place where the movie Lord of the Ring was filmed, it is also a country with one of the lowest unemployment rates in the freest economies of the world.

The successful regulatory environment supports people starting their own companies. The government has even decided to cut the corporate tax rate to help make the companies of New Zealand more profit. Business freedom in the country is the highest in the world – scoring 99.9 points out of 100.

3. Australia – 82.6 points

Canada is another country that ranks high in financial freedom, property rights, and freedom from corruption. The country is facing its 18th year of uninterrupted economic growth. Internationally Australia is a competitive producer of services, technologies, and high-value-added manufactured goods. Its export sector remains heavily focused on mining and agriculture.

Lately there has been some turmoil about Australia’s government using internet filtering to stop people seeing certain website. It is believed that if such actions continue, Australia will most probably fall in the list of the freest economies of the world.

2. Singapore – 86.1 points

This city state is the most advanced country in Asia. As a financial center Singapore was already used to growing its economy 6-8% per year until the financial crisis of 2008 hit the country. The country is so well run that instead of going into recession Singapore still managed to pull out from 2008 with a 1% economic growth.

Some other good things about Singapore is non existent corruption, extremely low taxes and one of the worlds most effective labor markets.

1. Hong Kong – 89.7 points

Hong Kong has held the position of the freest economy in the world for 15 years straight. Just like Singapore, this little island is one of the world’s largest financial centers. For those not knowing, Hong Kong is actually not a separate country but a part of the People’s Republic of China.

The reason Hong Kong can triumph the list of the freest economies in the world is because it is a separate region in China and therefore goes untouched by the Chinese communism. Hong Kong governs its own affairs and even has his own mini constitution.

Other notable countries

• United Kingdom – 11th place
• Luxembourg – 14th place
• Estonia – 16th place
• Japan – 19th
• Germany – 23rd
• France – 64th
• Italy – 74rd
• India – 124th
• Russia – 143rd

For a complete list of the Top 10 freest economies in the world see the world heritage website.

Here is a top 10 list of worlds richest countries according to CIA World Factbook and Wikipedia measured by GDP per capita. For those in the dark – GDP or Gross Domestic Product – is the value of all the goods that a country produces. GDP per capita stands for the value an average person produces.

10. Switzerland – $39,800 (GDP per capita)

This cheese making country is considered to be one of the most neutral countries in the world. During World War 2, people from other European countries deposited their money in the banks of Switzerland, knowing that their money would be safer there than in their home countries. Some well known Swiss companies include Nestle, Logitech, Rolex and Credit Suisse.

9. Equatorial Guinea – $44,100

The Republic of Equatorial Guinea is a country in Central Africa. Most people have never heard of it. This country flew into stardom after 1996 when large oil reserves were found in the nation of only 0,5 million people. While being one of the largest producers of oil in Africa, little has been made to improve the living conditions of the people. Corruption is widespread and ordinary people are mostly living in poverty. The gap between rich and poor is probably the largest in the world.

8. Ireland - $45,600

This member of European Union has been often admired as one of the most modern knowledge economies in the world. Ireland is the largest maker of computer software in the world. A study done by The Economist ranked the Celtic Tiger to have the best quality of life in the world.

7. United States – $46,000

What sets the US apart from most other countries in this list is its size. While most other countries in this list are among the smallest in the world the US has a population of over 300 million and a total land area of 3,79 million square miles (9.83 million sq km). The US is also home to the largest amount of billionaires in the world. It is speculated that as many billionaires live in the US as in the rest of the world.

6. Singapore – $48,900

This tiny country consists of 63 island and some mainland with a total area of only 270 square miles (704 sq km). With Hong Kong, South Korea and Taiwan it is considered one of the Four Asian Tigers. Singapore has the busiest port in the world and is the 4th largest foreign exchange trading center in the world. Singapore is widely believed to be the most business-friendly economy in the world.

Page 2 – The Top 5 richest countries in the world